Fourth Circuit Reverses Lower Court’s Ruling: FLSA Lawsuit Filed by NC EMT Can Continue

The U.S. Court of Appeals for the Fourth Circuit has reversed a lower court ruling that previously dismissed an FLSA overtime lawsuit filed by a North Carolina EMT. Sara Conner, an EMT for Cleveland County, North Carolina Emergency Medical Services filed the lawsuit, on behalf of herself and other similarly situated EMTs, in the U.S. District Court for the Western District of North Carolina, in January 2018. That court dismissed her lawsuit on August 21, 2019. Conner appealed that decision to the Fourth Circuit Court of Appeals. The Fourth Circuit reversed the lower court’s ruling. As a result of the Fourth Circuit’s findings, Conner’s lawsuit can now continue at the district court level.

Conner’s allegations are rather complex, in fact, far too complex for a simple blog post. However, in a nutshell, Conner alleges the county systematically underpays her and other EMTs’ pay in violation of the FLSA. Here is a little background along with an overview of her claims.

According to Conner’s complaint, Cleveland County EMTs work a rotating schedule consisting of 24 hours on duty, followed by 48 hours off duty. On average, Conner and her colleagues [estimated by Conner to number around 100] work either 48 or 72 hours per week. Conner alleges that she and other EMTs do not qualify for the FLSA’s §207(k) partial overtime exemption, and therefore are entitled to overtime pay for all hours worked over 40 every seven days. The FLSA requires that all non-exempt employees receive overtime for all hours worked over 40 every 7 days.

Conner’s specific allegations are complicated. Here is an overview as found in the Fourth Circuit’s ruling:

• In addition to the Ordinances, EMS personnel are subject to “policies and procedures for . . . payment of wages and overtime” administered by Cleveland Emergency Services as set forth in its Standard Operating Guideline “Section 14-Pay Plan”. As the “pay plan for overtime,” the Plan provides the calculation method for determining the overtime rate for 24 on/48 off EMS personnel. First, the employee’s regular hourly pay rate is determined by dividing the employee’s annual salary by 2,928 hours (the number of hours actually worked per year based on the 24 on/48 off schedule). Then, to determine the overtime rate, Cleveland Emergency Services multiplies the resultant hourly rate by 1.5. Conner does not take issue with this aspect of the Plan.
• In addition to the overtime rate, however, the Plan provides a “revised semi-monthly rate” for regular wages. The semimonthly pay is determined by multiplying the hourly rate that was used to calculate overtime by 2,080 (representing 40 non-overtime hours per week worked for 52 weeks), and then dividing this number by 24. The resulting number is paid to the employee each pay period. When an employee has worked overtime during a particular pay period, Cleveland Emergency Services will take the amount to be paid for overtime hours (calculated as described above) and add it to the revised semimonthly wages to be paid for that pay period.
•  Conner alleges that this “revised semi-monthly rate” unlawfully pays her regular wages using overtime compensation, resulting in overall lower pay. According to Conner, her annual salary established under the Ordinances represents her compensation for regular wages. Thus, she claims that for each semimonthly pay period, she should be paid regular wages—calculated as her salary established by the Ordinances divided by 24—plus any overtime as calculated under the Plan.
• It is helpful to consider an example of how Conner would calculate her compensation due under the Ordinances and the Plan. Federal law mandates that employers pay employees a premium hourly rate for each hour worked in excess of forty hours per week, which works out to 2,080 hours per year (40 x 52). 29 U.S.C. § 207(a)(1). The Plan notes that the actual number of hours worked annually in a 24 on/48 off schedule is 2,928 hours. That means that employees on the 24 on/48 off schedule work 848 hours overtime in a given year. Using the calculation method provided in the Plan, Conner’s hourly rate in 2017 was $12.60 (an annual salary of $36,900 divided by 2,928 hours). Accordingly, the hourly rate for overtime was $18.90 ($12.60 x 1.5). Multiplying 848 overtime hours by the overtime rate of $18.90 an hour should therefore have resulted in an additional $16,027.20 in compensation for Conner in 2017, which, combined with her regular wages of $36,900, would have meant her total compensation was to be $52,927.20.
• Yet Conner alleges that she did not receive this amount of compensation under the Plan’s “revised semi-monthly rate.” She alleges that instead the Plan cut her annual salary for regular wages from $36,900 (the amount established in the Ordinances) to $26,208 (the hourly rate, $12.60, multiplied by the annual hours for a 40-hour workweek, 2,080). As such, Conner alleges that Cleveland County unlawfully used her overtime wages to fill the “gap” between her straight-time compensation under the Plan—$26,208—and her full salary—$36,900.
• In this example, Conner’s total 2017 salary as calculated under the Plan would be reduced to $42,235.20 ($26,208 for regular time plus $16,027.20 for the 848 hours of overtime we assume for purposes of this example). Because Conner alleges her actual total salary should be $52,927.20 (assuming 848 hours of overtime), she claims she is missing out on at least $10,692 of compensation in a given year.
• At some point afterwards, Cleveland County changed its policy, effective January 1, 2018, to “beg[i]n paying [Cleveland Emergency Services] full-time EMS personnel regular wages in an amount equal to 1/24 of their annual salaries as designated by their corresponding salary grade and step” in the Ordinances. J.A. 14. Conner alleges, however, that Cleveland County should have paid EMS personnel in the same manner for the three years prior to January 1, 2018.

We will be keeping a close eye on this case as it develops.

Here are copies of the Fourth Circuit’s decision, as well as Conner’s complaint.